Three tips to pay your debt off faster this year

It’s easy to get carried away over Christmas and new year, but at some point we all have to come back to reality.

For one in two people, their scary realisation is they have less than $0 in their transaction banking account, according to an analysis of MoneyPlace data.

Yep. That means their bank accounts are into the negatives – technically known as an “overdraft”.

Overdraft figures shot up during Christmas to be almost 30% higher than usual and typically skyrocket to be almost 80% higher in February compared to any other time of year.

Our founder Stuart Stoyan shed some light on what this means.

“We enjoy our holiday break but as a nation we overspend to the point of going into negative in our transaction accounts,” Stuart said.

“That’s why the start of the year is an important time to reset your budget and consolidate any expensive debt before you start to get seriously behind.”

Stuart also suggests to taking the opportunity to get ahead before getting into trouble.

The average loan consolidated with MoneyPlace is $23,300 with borrowers saving an average of $5,600 over the life of a three year loan compared to average bank and credit card debt.

“Keeping on track and paying your bills and debt on time is especially important with comprehensive credit reporting and reduced accessibility to credit cards which started from January 1 this year,” Mr Stoyan said.

“Unlike most lenders, we actively encourage and support our borrowers to repay their loans early, with almost 40% of our loans currently ahead of schedule or paid off early.”

Here’s how to get back on track and stay ahead in 2019.

Consolidate your debt:

The Jan 1 credit card changes mean it will be more difficult to access zero interest balance transfer credit card offers for larger loans. That is why it is even more important to use your good credit rating to access personalised interest rates for personal loans.

Avoid extra fees and charges:

It might seem pointless to chip in extra to your loan if you hit early repayment fees. Instead choose a lender who won’t penalise you for getting ahead.

Set small goals:

Aiming to pay off $1000 extra of your loan might seem unachievable. Instead set aside an extra $20 a week (or more if you can afford it) to put towards your debt.